Full Separation Approved: Delphi Highlights Benefits of

Independence TROY, Mich. (PROTEXT) - With its full separation from GeneralMotors Corporation (NYSE: GM) approved by the GM board ofdirectors, Delphi Automotive Systems Corporation (NYSE: DPH)today announced plans to move aggressively forward with a post-separation business strategy designed to maximize shareholdervalue and take full advantage of independence. Delphi's board of directors voiced its support of the GMdecision. "With independence, Delphi can now fully implement itsplans to enhance shareholder value," said Thomas Wyman, Delphi'slead independent director. "For as long as full separation has been an option, we havemade clear our intent to focus the business on developing new andadvanced automotive technologies, broadening our customer base,improving manufacturing operations and creating new businessrelationships through acquisition or partnerships," said J.T.Battenberg III, Chairman, Chief Executive Officer and Presidentof Delphi. "This action by the GM Board of Directors pushes usforward on the path to realize our business objectives. "To the extent that full separation will improve Delphi'sopportunities to grow the business and become more profitable, weall benefit," said Battenberg. "Sharing this potential with ourlabor partners and strengthening our relationship with labor is ahigh priority throughout Delphi." "We plan to have our current pension plan benefits fullyfunded over the next few years on an economic basis. We expect tostart this funding with contributions of approximately $1.8billion between separation and the first part of next year," saidBattenberg. Delphi currently does not have hourly retirees, andanticipates having a small number of hourly retirees in the nextfew years. Battenberg's comments came in the wake of today's decision bythe GM Board of Directors to move forward with the completion ofDelphi's separation from GM by means of a tax-free spin-off. As aresult of the board's action, 80.1 percent of the ownership ofDelphi, 452.6 million shares of Delphi common stock now owned byGM, will be distributed to owners of GM $1-2/3 par value commonstock, and if GM receives a favorable ruling from the InternalRevenue Service (IRS) prior to May 14, 1999, GM will contributethe other 2.2% of Delphi shares it owns, 12.4 million shares, toa Voluntary Employee Beneficiary Association (VEBA) trust whichcan be used to fund benefits for hourly retirees. If such aruling is not received, the additional 2.2 percent of Delphishares held by GM also will be distributed to GM stockholders, inwhich case the same record date and payment date will be used. The spin-off will result in Delphi becoming a fullyindependent, publicly traded company on May 28, 1999. One hundredmillion shares of Delphi common stock had been sold by Delphi inan initial public offering completed in February 1999. With 465million new shares in the marketplace Battenberg today indicatedthat the company will take steps to familiarize new Delphishareholders with Delphi business strategies. Battenberg said full separation from General Motors provides anumber of key opportunities for Delphi. The benefits of separation include: * Increased Sales to Vehicle Manufacturers Other Than GM:Until today's action by the GM Board, Delphi's ability to expandsales to major vehicle manufacturers (VMs) other than GM has beenlimited by a general reluctance to source from a supplier ownedby a major competitor. Separation from GM lifts this barrier, andDelphi will -- over time -- be able to substantially growsales to VMs other than GM. * Increased Financial and Strategic Flexibility: Separationwill allow Delphi to quickly execute investment and acquisitionor partnership decisions and will increase flexibility infinancing through capital markets. Formerly, investments requiredapproval from the parent corporation, which balanced competingrequests for capital from several business sectors. * Potential for Continued Improvement of Organized LaborRelationships: Delphi has worked hard on its relationship withlabor over the last several years, and is proud of the progressmade. We will now independently continue to pursue improvedrelations through collaborative efforts with our union colleaguesfocused on improving our manufacturing operations andimplementing the Delphi Manufacturing System. Through theseefforts we hope to continue to improve our quality andresponsiveness to customer needs, and provide stability to ourbusiness prospects. Where new non-GM business is concerned, Battenberg today notedthat Delphi continues to receive greater numbers of bidopportunities since the Initial Public Offering in February 1999,which he said is indicative of non-GM customer acceptance ofproducts and technology from an independent Delphi. Recentexamples include: $550M in long-term contracts for supply ofmodular doors to Navistar International, MAN and two other majorOEMs; a $35M contract to provide ABS and GENIII integral wheelspindle bearings to Daewoo; a $20M contract for steering wheelsand airbags on a 2000MY VW. "With this kind of reaction by customers we are tremendouslyexcited by the potential that exists in the marketplace to takeadvantage of the benefits of Delphi's full independence," saidBattenberg. "This is just the beginning." Delphi Automotive Systems (NYSE: DPH), with headquarters inTroy, Mich., USA, is a world leader in automotive component andsystems technology. Delphi's 3 business sectors -- Dynamics andPropulsion; Safety, Thermal and Electrical Architecture; andElectronics and Mobile Communications -- provide comprehensiveproduct solutions to complex customer needs. Delphi has more than198,000 employees and operates 168 wholly owned manufacturingsites, 40 joint ventures and 27 technical centers in 36countries. Regional headquarters are located in Paris, Tokyo andSao Paulo. Delphi can be found on the Internet athttp://www.delphiauto.com. In this press release, use of the terms expects, intends,believes, plans and similar words are associated with forward-looking statements that are inherently subject to numerous risksand uncertainties. Accordingly, there can be no assurance thatthe results described in such forward-looking statements will berealized. The principle risk factors which may cause actualresults to differ materially from those expressed in forward-looking statements contained in this press release are describedin various documents filed by GM and Delphi with the U.S.Securities and Exchange Commission, including GM's Annual Reporton Form 10-K for the Year Ended December 31, 1998 (at page II-22), and Delphi's Annual Report on Form 10-K for the Year EndedDecember 31, 1998 (at page 54). Stockholders who have questions about technical issues relatedto the distribution can call the Information Agent, Morrow & Co.,at 800-566-9058. ots Original Text Service: Delphi AutomotiveSystems Corporation Internet: http://www.newsaktuell.de Contact:Steve Gaut, 248-813-2946, or Peter Rowe, 248-813-2985, both ofDelphi Company News On-Call:http://www.prnewswire.com/comp/076666.html or fax, 800-758-5804,ext. 076666 Web site: http://www.delphiauto.com

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